A Recurring Deposit A/C is a basic monthly saving plan that allows customers to save money over a specified period. It is the most preferred investment plan by the salaried/ fixed income individuals. Customers can choose the tenure of the deposit and the monthly payment amount as per their convenience. These accounts are a great place for your emergency fund. These accounts can be funded through Standing Instructions by the customer to the bank where they have a Saving Account or Current Account. The interest earned gets credited automatically to your account every year on quarterly basis.
Features of Recurring Deposit Account:
- Open an RD account by investing a minimum of Rs.100 per month.
- RD accounts offer an interest rate higher than that of a savings account.
- A single account holder can open any number of RD accounts.
- Set standing instructions so that the instalments are automatically deducted from your savings account without the need for manual interaction.
- Senior citizens may get an additional 0.5% interest rate.
- RD accounts can be opened in the name of minors; however, only under the supervision of parents/guardians.
- Banks also send transaction alerts to their customers via SMS as a part of SMS banking services.
